CLA-2 CO:R:C:F 951238 JGH
John B. Pelligrini, Esq.
Ross & Hardies
529 Fifth Avenue
New York, New York 10017-4608
RE: Classification of an instant coffee mix
Dear Mr. Pelligrini:
Your letter of February 26, 1992, concerns the tariff
status, under the Harmonized Tariff Schedule of the United States
(HTSUS), of an instant coffee mix blended in Canada.
FACTS:
The instant coffee mix will be blended in Canada and
imported into the United States in bulk and packaged in retail-
sized packages. In Canada the following components will be
blended:
Percent
by volume of Product Value
Sugar 50 13.4
Milk powder 42 56.9
Coffee 7.5 28.2
Cocoa powder 0.5 0.4
The sugar is said to be refined in Canada; the milk powder
is of United States origin, and the instant coffee is from
Brazil, with cocoa powder sourced in the United States.
ISSUE:
Classification of an instant coffee mix.
LAW AND ANALYSIS:
Classification is urged under the provision for preparations
with a basis of coffee in subheading 2101.10.40, HTSUS, in behalf
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of the importer. It is noted that the Explanatory Notes indicate
that the provision includes preparations such as "coffee pastes"
which are mixtures of ground, roasted coffee with vegetable fats.
Another example given is of a tea preparation consisting of
powdered milk, tea and sugar. Thus, it is felt that a similar
preparation based on coffee would be similarly classified.
Subheading 2101.10.40 is a more specific classification than
subheading 1901.90.30, which is described as basket provision
for food articles based on milk.
We agree. It is believed that the Explanatory Notes for heading
2101 make it clear that this type of instant coffee product would
be included in subheading 2101.10.40, HTSUS.
The next question concerns the eligibility under the United
States-Canada Free-Trade Agreement Implementation Act of 1988.
(CFTA).
The first claim is that applicable CFTA origin rule is the
change in classification from one chapter to another. General
Notes 3(c)(vii)(R)(1) and (4). The change for sugar from heading
1701 to 2101, would warrant, it is claimed, the sugar being
regarded as Canadian. The milk powder is of U.S. origin, but it
is acknowledged that the instant coffee is of Brazilian origin
and does not undergo the requisite chapter change.
Under General Note 3(c)(vii)(R)(aa), a change from one
chapter to another is required, concerning chapters 16 through
24. Since it is concluded the instant coffee provides the
essential character of the product there has to a change from the
classification of the instant coffee to the finished product, for
the product to qualify under the CFTA. Instant coffee is
classifiable under subheading 2101.10.2025, and the instant
coffee mix is classifiable under 2101.10.4060, HTSUS. Therefore
the product has not been processed from one chapter to another.
Another argument is that the product would qualify for CFTA
benefits by virtue of General Note 3(c)(vii)(H). This rule
applies to the value of the goods to be assembled in Canada.
However, it has no application to the product in issue, since the
blending of the instant coffee product is not considered an
assembly operation.
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HOLDING:
The instant coffee preparation described is classifiable in
subheading 2101.10.4060, HTSUS, as a preparation with a basis of
coffee. The rate of duty is 10 percent ad valorem. In addition
it is subject to the quota restraints of 9904.60.60, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division